Market Update
September 28, 2009
Market Update: While '08 Sales Decline, U.S. Ranks Third in Global Dairy Exports
By Bob Yonkers, IDFA Chief Economist, Ph.D.
At last week's World Dairy Summit, conference participants received a complimentary CD with the 2009 edition of the World Dairy Situation published by the International Dairy Federation (IDF). This annual publication summarizes major trends in dairy production, consumption, trade and prices around the world.
The report noted that world milk production increased by 1.6 percent in 2008 to a record 689.8 million metric tons. Many in the United States think of "milk" as only coming from cows, but less than 84 percent of that world total did; the rest consists of milk from (water) buffalo (12.7 percent), goats (2.2 percent), sheep (1.3 percent) and even camels (0.2 percent). Another surprise for the U.S. dairy industry is that only about 53 percent of total world milk production is delivered to processing plants. The rest is consumed or used to make dairy products on the farm and sold to consumers directly.
The production of liquid milk products, including drinkable cultured milk products like buttermilk and yogurts, declined for the first time this decade in 2008. However, the production of other manufactured dairy products worldwide, like butter and cheese, reached record levels. Unlike in the United States, where relatively little whole milk powder is produced (50 million pounds versus 1.9 billion pounds of nonfat dry milk and skim milk powder), world production of whole milk powder at 4.5 million metric tons far exceeds the 3.3 million metric tons for skim powder.
World trade in dairy products declined 2.8 percent in 2008 to about 42 million metric tons. The report cited the world financial crisis as a major factor in this decline. While the European Union and New Zealand account for a combined market share of about 60 percent of world dairy exports, the United States held the third position, ahead of Australia, for the second straight year.
After reaching record-high levels in 2007 and early 2008, milk and dairy product prices around the world fell dramatically in late 2008 and into the first half of 2009. The report noted that farm milk prices fell most quickly in countries where a disproportionately high share of domestic production was exported.
The entire report consists of more than 100 pages of text, charts and data tables, and it includes individual country reports for 47 member countries of IDF. The report is available for 75 Euros (110.00 US$) at the IDF Web site under Latest Publications (bottom right).
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